Geithner: Growth Draws Capital to Emerging Markets

Treasury Secretary Timothy F. Geithner said capital is going to emerging markets because of their growth outlook, a contrast with officials from developing nations who blame the U.S. for fueling asset-bubble dangers.

“You can have too much of a good thing, but it is fundamentally an encouraging thing,” Geithner told reporters Saturday after a meeting of finance ministers from the Asia-Pacific Economic Cooperation group in Kyoto, Japan. “What is driving the flows of capital you’re seeing into emerging markets is fundamentally a positive reflection of confidence in the likely trajectory of growth rates in those countries over time.”

Officials from nations ranging from Brazil to South Korea have blamed the U.S. Federal Reserve’s monetary stimulus for inciting the danger of excessive investment flows that cause asset bubbles. Geithner said the risk of accelerating asset and consumer prices is “one reason why it’s important to let exchange rates to move closer” to economic fundamentals.

Major emerging market economies “are in the early stages of a very long period of very strong growth in productivity and living standards -- that’s a very encouraging thing for the world,” the U.S. Treasury chief said.

Treasury Secretary Timothy F. Geithner said capital is going to emerging markets because of their growth outlook, a contrast with officials from developing nations who blame the U.S. for fueling asset-bubble dangers. You can have too much of a good thing, but it is...